Which treaties qualify for the JGTRRA's special dividend rate?

• Author: Koppel, Michael D.
• Position: Jobs and Growth Tax Relief Reconciliation Act of 2003

Section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) reduced the income tax rate for qualifying dividends received by individuals to 15% (5% for taxpayers in the 10% mid 15% tax brackets).

Under Sec. 1(h)(11)(B)(i)(II) and (C), as added by JGTRRA Section 302(a), dividend from foreign securities qualify for the lower rate if they are traded on an established U.S. securities market. Foreign securities not traded on a U.S. securities market can qualify if certain treaty requirements are met. Notice 2003-69 lists the foreign countries whose tax treaties meet the JGTRRA's requirements. Exhibit 1 above lists the countries mentioned in the notice.

Exhibit 1: Countries with qualifying tax treaties

Australia

Austria

Belgium

Canada

China

Cyprus

Czech Republic

Denmark

Egypt

Estonia

Finland

France

Germany

Greece

Hungary

Iceland

India

Indonesia

Ireland

Israel

Italy

Jamaica

Japan

Kazakhstan

Korea

Latvia

Lithuania

Luxembourg

Mexico

Morocco

Netherlands

New Zealand

Norway

Pakistan

Philippines

Poland

Portugal

Romania

Russian Federation

Slovak Republic

Slovenia

South Africa

Spain

Sweden

Switzerland

Thailand

Trinidad and Tobago

Tunisia

Turkey

Ukraine

United Kingdom

Venezuela

FROM MICHAEL D. KOPPEL, CPA, MBA, MSA, GRAY, GRAY & GRAY, LLP, WESTWOOD, MA

Editor:

Michael D. Koppel, CPA

Partner

Gray, Gray & Gray, LLP

Accounting Firms Associated, Inc. (AFAi)

Westwood, MA

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